Gain is lowest, month over month, since August 1997

`Still pretty brisk'

`It seems like the momentum is dying somewhat'

The suspense of when the hot-running real estate market in Baltimore would finally begin to cool ended yesterday when existing home sales recorded their lowest month-over-month gain since August 1997.

Sales in September rose 1.9 percent over September 1998, according to statistics released yesterday by the Metropolitan Regional Information System, the housing database used by real estate agents and brokers.

Since the summer of 1997, sales of existing homes in the Baltimore metropolitan area have risen steadily, turning a market had been driven by buyer demands into a seller's market, with multiple contracts and escalating home prices in many sought-after neighborhoods.

However, yesterday's report may be the first signal that the market is at least taking a deep breath and pausing.

"It seems like the momentum is dying somewhat, and that is precisely what we and many other economists have been anticipating for the past three months," said Anirban Basu, director of applied economics, at the Regional Economic Studies Institute at Towson University.

"Earlier in the year, rising mortgage rates actually pushed many buyers into the market so that they could secure reasonable mortgage rates.

"Much of this pent-up demand has been satisfied. And we will continue to see in Maryland a slowing of this momentum of home sales as the new year approaches."

And the downshift was evident in September's pending contracts, which are an indication of future activity. Those contracts had a 3.7 percent gain over September 1998.

"It seems to me, just my gut feeling, that it might be getting a little slow," said Patrick J. Kane, vice president for Coldwell Banker Grempler Realty Inc. in Towson. "But it is all relative. You say it's slow now, but compared to what? It's still pretty brisk."

However, September's report marked the first time in more than two years that not one jurisdiction recorded a double-digit gain. The city had the largest increase in sales with a 6.48 percent gain over the year-earlier period.

The biggest drop came in Howard County, where sales fell by almost 17 percent. However, the average sales price in Howard continued to climb. A single-family detached home rose 4.58 percent to an average of $255,425, and a townhouse cost buyers an average of $137,914, up 5.63 percent over September 1998.

But, according to Libby S. Berman of the Greenspring office of Long & Foster Real Estate Inc., buyers overall may not be willing to keep increasing the stakes for certain properties.

"The sellers have gotten too ambitious and the buyers have recognized it," Berman said. "There is still a demand by the buyers, and they are buying high and fast, but not as high and fast they were doing a couple of months ago."

Pat Hiban, an agent and associate broker with Re/Max Advantage Realty in Columbia, also has noticed a change among buyers.

"Earlier this year, we had many situations where you would have multiple offers, and buyers were just creating an auction-type atmosphere, paying more for the house than what it was listed for," Hiban said.

"But we've had some situations recently where we have had multiple offers and [the bids] have all been low no one has stepped up to the plate."

Said Berman: "The truth is if you didn't advise your buyer to bid quickly and high five months ago, they would have lost what they were looking for. But now I don't think that is true."

Yet what might keep the market stirring is a housing inventory that has continued to dwindle through the year.

In September, there were 3,457 new listings coming into the marketplace, but that was the lowest monthly number of the year. And the overall housing inventory for the metropolitan area was at 14,042, down from an April high of 15,381.

"It is still a healthy market. It is still doing well, but I believe it is getting more sensible, and that is good," Berman said.